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2019 Annual Report

 

TRANSFORMATION

2019 Annual Report

Continental Corporation - 2018 Annual Report
 

Development of Strategic Sustainability Focus Areas

1 2 3 4 5

Clean mobility

Our concept
Zero-emission driving is vital to the current transformation in the mobility industry and is directly related to sustainability. At the same time, this transformation presents opportunities and risks for Continental. On the one hand, Continental develops and produces pioneering technological solutions that pave the way for zero-emission driving. These include, for example, electrified drive systems, lightweight design solutions, solutions for automated driving, new transport concepts and rolling-resistance-optimized tires, as well as bridging technologies in the form of solutions for clean gasoline and diesel vehicles. In doing so, we rely both on new product developments and on the further development of the existing product portfolio. On the other hand, the speed of the transformation poses enormous challenges, which we are actively addressing with various measures as part of the Transformation 2019–2029 structural program. For more information, see “Good working conditions” on page 51.

In fiscal 2019, Continental decided to pursue the spin-off of its powertrain business (renamed Vitesco Technologies) as a separate company, thus enabling it to operate more independently, flexibly and efficiently and shape the transition from combustion drives to electric mobility and the associated growth opportunities. More information on the corporate strategy and on research and development can be found in this annual report on pages 41 and 42 and pages 46 and 47, respectively.

As an indicator for our product range that contributes to clean mobility, we consider the percentage of products in consolidated sales that demonstrably contribute to energy efficiency or to the reduction of pollutant or carbon dioxide emissions.

Results of the concept
In fiscal 2019, products that demonstrably contribute to energy efficiency or to the reduction of pollutant or carbon dioxide emissions accounted for 42% (PY: around 40%) of consolidated sales, according to our own modeling.

Key figures for clean mobility
  2019 2018
Percentage of products that demonstrably contribute to energy efficiency or to the reduction of pollutant or carbon dioxide emissions 42 -401

1 In 2018, not reported as key figures but as indicative, rounded statement in the text.

For more information on clean mobility, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Climate protection

Our concept
Continental is fully committed to the Paris climate agreement. We have therefore set ourselves the target of becoming completely carbon-neutral in our operational processes and value chains by 2050. We see the achievement of this target as a key requirement for the corporation’s future viability.

In a first step, we will switch all externally sourced electricity in global production to renewable energy by the end of 2020, including through energy attribute certificates. The aim then is to also make all of Continental’s production processes carbon-neutral by 2040, as well as the entire value chain by 2050. The value chain covers in particular our supply chains, logistics and the use of our products. The most important levers for these targets are the use of renewable energies, the development of new technologies and increases in efficiency.

Results of the concept
In fiscal 2019, electricity from renewable energy sources accounted for around 5.3% of all electricity purchased. Our own CO2 emissions (Scope 1 and 2 of the Greenhouse Gas (GHG) Protocol) decreased to 3.22 million metric tons (PY: 3.35 million metric tons). These include direct CO2 emissions from fossil fuels (Scope 1 of the GHG Protocol) and indirect CO2 emissions from the generation of purchased electricity, steam and heat (Scope 2 of the GHG Protocol). The reduction in 2019 was the result of a decline in energy consumption due mainly to the current economic situation. Reporting on indirect CO2 emissions along the value chain (Scope 3 of the GHG Protocol), in particular for the use of own products and purchased materials and components, is included in the integrated sustainability report.

Key figures for climate protection1
  2019 2018
Direct CO2 emissions (Scope 1) in millions of metric tons of CO2 0.84 0.88
Indirect CO2 emissions (Scope 2) in millions of metric tons of CO2 2 2.38 2.473
Total own CO2 emissions (Scope 1 and 2) in millions of metric tons of CO2 3.22 3.353

1 Based on the reporting on the environmental data collection system that includes the relevant production and research and development locations (not including fleet consumption). Definitions based on the standards of the Global Reporting Initiative (GRI) and in accordance with the Greenhouse Gas (GHG) Protocol.
2 Scope 2 emissions are calculated on the basis of reported energy use using the location-based method of the GHG Protocol and largely by applying emission factors from Defra (January 2019) and IEA (May 2018).
3 Figure for 2018 was recalculated due to an adjustment in the application of the location-based method of the GHG Protocol.

For more information on climate protection, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Circular economy

Our concept
At Continental, there are a number of different initiatives and projects for implementing a circular economy that are managed at various levels within the corporation. They implement a circular economy with varying degrees of circularity for the demand and use of materials. Examples include the use of recycled materials, the retreading of tires, the reduced use of plastics and operational waste management.

Thinking in terms of resource cycles represents a long-term transformation of resource management and requires environmental awareness and knowledge of interdependencies within the company on the part of employees. For this purpose, a corporate-wide awareness and participation campaign on resource conservation and waste prevention has been developed and will be rolled out in fiscal 2020.

We use the waste recycling rate as an indicator for the circular economy at Continental. It measures the proportion of waste that has been recycled or thermally recovered by external service providers. We have set ourselves the target of increasing the waste recycling rate to 95% by 2030.

Results of the concept
The waste recycling rate in fiscal 2019 rose to 80% (PY: 78%).

Key figures for circular economy1
  2019 2018
Waste recycling rate in % 80 78

1 Based on the reporting on the environmental data collection system that includes the relevant production and research and development locations. Definitions based on the standards of the Global Reporting Initiative (GRI).

For more information on the circular economy, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Sustainable supply chains

Our concept
In our Business Partner Code of Conduct, we define the fundamental sustainability requirements for our supply chains, including with regard to human rights, working conditions, environmental protection and anti-corruption.

Before even establishing a business relationship, we check potential new suppliers and service providers by means of self-assessment and sometimes on-site audits, which may also include sustainability topics (such as fire protection and occupational safety).

By signing the Business Partner Code of Conduct, suppliers and service providers are also expected to promote the implementation of the sustainability requirements mentioned therein in their own supply chains. Furthermore, we have drafted a special sourcing policy for the purchase of natural rubber to improve conditions in rubber cultivation, which we likewise hand over to the relevant suppliers and with which we require compliance.

We assess compliance with the sustainability requirements of the Business Partner Code of Conduct in particular with the help of self-assessment questionnaires via sustainability platforms EcoVadis and NQC, which represent a generally accepted standard for sustainability assessments of suppliers in our industries. In the event of violations of the Code of Conduct, Continental reserves the right to demand improvements or to terminate the business relationship. Violations can also be reported via the Compliance & Anti-Corruption Hotline, which is available around the clock and worldwide.

Sustainability in the supply chains is coordinated by the relevant purchasing organizations, which are established at Continental by business area and product group with teams in the various countries.

Results of the concept
As at December 31, 2019, valid self-assessment questionnaires from 670 suppliers (PY: more than 750) were available via the two sustainability platforms EcoVadis and NQC. This corresponds to a completion rate of 57% of suppliers selected for this process (PY: more than 60%).

Key figures for sustainable supply chains1
  Dec. 31, 2019 Dec. 31, 2018
Number of available, valid supplier self-assessment questionnaires 670 > 750

1 Based on the self-assessment questionnaires via EcoVadis and NQC.

For more information on sustainable supply chains, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).